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July 27, 2008

Steam Rising Over Clean Water Initiative

by Sam Savage

By Margaret Bauman, Alaska Journal of Commerce, Anchorage

Jul. 27--A clean water initiative on the Aug. 26 statewide election ballot to limit the discharge of certain toxic pollutants into state's waterways, has become a focal point in increasingly heated debates on the future of Alaska mining.

Proponents and opponents of Proposition 4 agree on one thing: the outcome of this vote will affect development of the Pebble prospect, a massive proposed copper, gold and molybdenum mining venture in Southwest Alaska now in the exploration phase.

The ballot measure, published by the state Division of Elections, imposes two water quality standards on new large-scale Alaska metallic mineral mining operations in excess of 640 acres in size.

The first standard would not allow such a mining firm to release into water a toxic pollutant that will adversely affect human health or the life cycle of salmon. The second would not allow such a mining operation to store mining wastes and tailings that could release sulfuric acid, other acids, dissolved metals or other toxic pollutants that could adversely affect water used by humans or by salmon.

The measure has the support of numerous conservation, commercial fisheries and other interests, including sport anglers and hunters, who argue that the legislation will provide safeguards not yet in existence for the Bristol Bay watershed, home of the world's largest sockeye salmon run. Proposition 4 will protect the pristine environment of salmon spawning areas on which subsistence users as well as Alaska's billion dollar commercial and sport fishing economy depend, proponents say.

Proposition 4 is, in fact, a wolf in sheep's clothing, counter opponents of the ballot measure. It is a serious threat to Alaska's economy that could result in the loss of thousands of mining and industry-related jobs across Alaska, according to Alaskans Against the Mining Shutdown.

On July 21, Rose Barr, resource manager for NANA Development Corp., which operates the Red Dog zinc and lead mine in Northwest Alaska, told the Anchorage Chamber of Commerce that the ballot measure is defective and deceptive, that it arbitrarily overrides Alaska's proven, stringent environmental regulatory process.

"Concerns about Pebble shouldn't be addressed with an initiative that adversely impacts an entire industry," said Barr, who argued that passage of the measure would threaten the state's entire resource based economy.

Arguing in support of Proposition 4 was Bruce Switzer, senior technical advisor for Alaskans for Clean Water, who has more than three decades of experience in the metals and mining industry. From 1990 to 1992, Switzer was director of environmental affairs for Cominco Ltd. Cominco, a Canadian mining company now partnered with NANA Regional Corp. in the Red Dog Mine, is the same mining firm that sold its claims in the Pebble prospect to Northern Dynasty Minerals, which is now partnered with South African-based Anglo American in the Pebble Partnership.

What Proposition 4 does is restore the protection of salmon spawning streams that Gov. Frank Murkowski eliminated, Switzer said. It balances the interests of commercial and sport fishing with mining and sends a strong message to legislators and regulators that the largest salmon run in the world must be protected, he said.

What it does not do is shut down any existing mines or stop expansion of existing mines, nor does it impact any mines smaller than 640 acres, he said.

Switzer said there were several reasons that Pebble posed an unacceptable risk to the Bristol Bay watershed.

No large open pit mine has ever been built in an area as environmentally sensitive and economically important that is as hostile to mining, he said.

Switzer also said every large mine ever built in remotely similar hydrologic conditions has polluted surrounding water, and that even the best planned mines in benign environments have routine releases of toxic chemicals caused by ineffective management, changed circumstances and accidents.

Switzer also noted that the U.S. Geological survey has predicted an earthquake on the Lake Clark fault of a magnitude that sooner or later would result in dump and dam failure at the proposed mine. He also said construction and maintenance of a 100-mile long transportation corridor to a new port at Cook Inlet to accommodate mining interests would cause inevitable sedimentation and kill salmon eggs in hundreds of streams.

Barr countered that the system in place is working, resulting in several thousand direct and indirect high paying jobs in mining, and millions of dollars in annual wages. Barr noted that in 2007 the mining industry invested $275 million in exploration in Alaska, up 54 percent from 2006.

Mining revenues benefit all Alaskans, said Barr, pointing to revenues of $10 million in the Northwest Arctic Borough, $3 million in the Fairbanks North Star Borough, and $1 million in Juneau, plus $189 million in state and municipal revenues in 2007.

Beyond the issue of Proposition 4 itself, the debate continues over several issues related to the Pebble exploration project and the state permitting process for large mine operations.

Opponents of the Pebble mine have raised questions on the validity of baseline studies being conducted at the Pebble site during exploration.

"It is a common practice for baseline studies to occur with drilling activity," said Sean Magee, a spokesman for the Pebble Partnership. "You can't justify the expense (of baseline studies) unless you know there is some area of mineralization. It's a process of mine development. It begins with exploration and then environmental studies, once the area (on mineralization) is identified," he said.

Tom Crafford, mining coordinator for the Alaska Department of Natural Resources, said the baseline studies are conducted in anticipation of possible development, development not foreseeable until the exploration has yielded results that support the potential for development. Ultimately, he said, the reviewing state and federal agencies must determine the acceptability and adequacy of the baseline studies, including whether or not those studies properly represent pre-development conditions.

Crafford said he believes the current system of baseline data acquisition by companies, with review by state and federal agencies has worked, and continues to work well.

Ed Fogels, director of DNR's office of project management and permitting, said that if the government were required to do all the baseline work prior to allowing exploration, then all resource development in Alaska would cease.

"First off, we don't have the resources to do such extensive baseline work," Fogels said. "I don't know the exact figure, but the Pebble Partnership has spent many tens of millions of dollars on baseline work, probably close to the entire DNR budget. More significantly, we wouldn't know where to do the baseline work, because we don't know where the future mineral deposits or oil and gas discoveries are," he said. "Basically we would have to do the baseline work for huge areas of state lands, and that would cost unimaginable sums of money."

Fisheries economist Gunnar Knapp, of the Institute of Social and Economic Research at the University of Alaska Anchorage, questions the whole issue from a different perspective, that of an economist dealing with Alaska's fishing industry.

Knapp said he has not studied the Pebble mine issue specifically and is not voicing an opinion about whether or not the mine should be developed.

"It seems to me that the fundamental issue raised by Pebble is whether we want that kind of change," he said. "What concerns me is that I'm not aware that the current permitting process provides for a real public discussion about whether this kind of project fits with our overall goals or not. Put differently, the issues are bigger than whether water quality or the fish are protected, but I'm not sure that we are adequately discussing those issues.

Knapp also said he was concerned about whether local residents, those most affected by Pebble, are adequately and appropriately represented in the discussion, and that any changes in mining law or the permitting process be done with great care. If, for example, the state were to make a dramatic change to the ?rules of the game' for developing a mine in the region, this could affect business perceptions about the political risks of investing in Alaska, so we should be careful and deliberate and thoughtful about anything we do," he said.

Further information on this issue is at: www.AlaskansForCleanWater.com and www.againsttheshutdown.com